As Hong Kong property again sets new highs, it’s getting harder to find any conventional yardstick to make sense of these stretched prices.

After a late summer spurt in transactions sent the Centa-City leading index to a new record, last Friday came reports of Hong Kong’s most-expensive-ever property sale. A luxury apartment in the Peak district sold for a staggering 470 million Hong Kong dollars ($61 million) or HK$75,806 per-square-foot, according to the Hong Kong Economic Journal.

But it’s not just the strata-title properties that are soaring, as even modest living spaces are up 100% in the past two to three years.

If you want to buy a two-bedroom, 700-square-foot apartment built in the last 25 years close to the Central business district, expect no change from $1 million.

To understand these sky-high prices, we need to find a new way to analyze them, say some analysts.

Barclays Capital in a new report classifies Hong Kong as an equity- driven — rather than a mortgage-driven — property market, where we need to think of apartments more like a “deposit box” to hold wealth, rather than homes for people.

To support this contrarian analysis, they point to a reduction in leverage in the overall market and a decline in owner-occupants.

The 2011 census revealed 60% of owners have no mortgage on their property, up from 48.5% a decade earlier. Owner-occupation rates have also dropped from 73% in 2006 to 70% in 2007, says Barclays, as cash-rich investors price genuine homeowners out of the market.

This description certainly fits the behavior of the recent influx of buyers from mainland China, who often leave apartments empty rather than rent them.

In such a market, wealthy buyers do not worry about mortgage rates or house-price-to-household incomes, meaning we can discard traditional measures of value, such as affordability.

The upshot is that housing prices can grow well in excess of incomes.

This does a pretty good job explaining how we got to fresh property peaks, but Barclays notes that staying at these levels is another matter.

To maintain prices requires a continued infusion of equity into the market, much of which can only come from first-time buyers.

While in an equity-driven market, buying from end-user buyers matters less, it will still be needed if there is a slowdown in equity or investment demand.

So we again come back to affordability. Here, low interest rates have played a big part in keeping mortgages affordable in Hong Kong, with monthly payments still less than 50% of household income.

But high prices have created a new affordability constraint, as it now requires a small fortune just for the 30% down payment. Today, the average down-payment cost for a first-time buyer is equivalent to 3.3 times the average annual household income.

Rather ominously, this level was last reached at the property-market peaks of 1982 and 1997 in Hong Kong, says Barclays. The subsequent crash in 1997 saw residential-property prices fall more than 60%.

They add another sign of stretched prices is that the current price-to-household-income ratio is at 11 times, against a long-term average of 7.1 times income.

Another characteristic of an equity-driven property market is it can be more volatile than one dependent on mortgages. This means that although individuals have bought bricks and mortar, their investments may behave more like leveraged stocks.

It also follows that in a “deposit box” property market, investment demand and external liquidity factors are likely to be particularly influential on prices.

Here, Hong Kong has to watch for a potential liquidity pullback from the euro crisis, as well as policy actions of the U.S. Federal Reserve. In recent weeks, attention has turned to the potential for renewed quantitative easing in the U.S., which has typically pushed property prices higher in Hong Kong as the local currency — pegged to the U.S. unit — weakens.

In such a scenario, expect a renewed focus on the durability of the Hong Kong currency peg as inflationary pressures intensify, which could also trigger an influx of capital into Hong Kong dollar assets.

Another unknown is the political response to renewed property-price increases, as only a matter of weeks earlier the newly installed government of C.Y Leung was promising to make homes more affordable.

Calls to act are likely to become deafening if more people buy the argument they can’t afford property in a market designed for wealthy mainland Chinese looking to deposit off-shored money.

At the weekend, it was announced that from next month, another 4.1 million non-permanent residents from neighboring Shenzhen can visit Hong Kong. Barclays say they have a negative outlook for the Hong Kong property sector.